Florent Brones' video on our investment strategy recommendations for March

Since the consolidation in February, the overbought situation in the stock markets has deflated.  Now we are focusing on our positive opinion on equities in the medium term (12 months) for the same three main reasons: the expected rise in corporate profits in 2018 and 2019, small rate increases on the cards, and finally moderate stock market valuations, with the exception of the US market which is expensive compared with historical standards. Savings flows from bond investments into equities will continue.

Volatility should remain high. Several risks exist (rate hikes, political risk in Europe, risk of American protectionism measures, debt levels in the emerging world) but they appear manageable because fundamentals are generally solid.

We remain cautious on bond markets. Economic growth is on a good trend, inflation is starting to accelerate at a time when the Trump administration has decided to implement a stimulus policy via tax cuts.  Last month we raised our US rate targets: the Fed will tighten monetary policy more than expected (5 x 25bps; including one in 2019).